Inputs to organize
- Sale price
- Selling costs
- Debt payoff
- Cash received
- Replacement price
- Replacement debt
- Additional cash
What the worksheet shows
- Net equity
- Value replacement comparison
- Debt comparison
- Potential cash or liability shortfall
How the model works
Estimate net exchange equity from sale price less debt payoff and eligible selling costs, while keeping non-exchange cash movements visible.
Compare total replacement-property value with the relinquished-property value entered by the user.
Compare exchange equity reinvested with estimated net exchange equity.
Compare liabilities relieved with replacement liabilities plus additional cash contributed where relevant.
Report shortfalls separately; do not combine value, equity, and debt differences into one unexplained number.
Checks before relying on the output
- Require nonnegative sale, debt, and replacement amounts.
- Warn when selling costs exceed sale price.
- Warn when replacement debt and additional cash do not reconcile with purchase value and equity.
- Do not label a shortfall as taxable boot without the complete gain calculation.
The result is an educational transaction estimate and cannot determine recognized gain without complete tax facts.
Common questions
What does the estimator mean by exchange equity?
It is an organizing estimate of sale proceeds remaining after entered debt payoff and eligible costs. The qualified intermediary's actual balance and closing statements control.
Must replacement debt equal the old loan?
Debt is one part of the comparison. Additional cash may affect the liability analysis, but the complete transaction and gain calculation determine the tax result.
Can several purchases satisfy the replacement-value comparison?
Yes. The tool can aggregate multiple replacement properties while preserving each property's price, debt, equity, and closing status.
Why are value and equity shown separately?
A purchase can meet one comparison and miss another. Showing them separately prevents a large loan or cash contribution from concealing an unreinvested amount.
Is the shortfall the same as recognized gain?
No. It is a planning flag. Recognized gain depends on realized gain, money or other property received, liabilities, costs, basis, and other facts.
